Use following information to calculate Return on Net Operating Assets (RNOA) for
ID: 2734632 • Letter: U
Question
Use following information to calculate Return on Net Operating Assets (RNOA) for Walmart for 2011:
Calculate Return on Net Operating Assets (RNOA) for Walmart for 2011:
15.63%
12.87%
4.78%
9.09%
16.43%
Walmart INCOME STATEMENT 2010 2011 TOTAL REVENUE 421,849 OPERATING EXPENSES 396,307 OPERATING PROFIT (EBIT) 25,542 Non-operating Expenses(Net Interest expense) 2,004 TAXABLE PROFIT (EBT) 23,538 Tax 7,579 NET INCOME FROM CONTINUED OPERATIONS 15,959 BALANCE SHEET 2010 2011 AVERAGE OPERATING ASSETS 162,360 173,137 167,749 NON-OPERATING ASSETS 8,047 7,526 7,787 TOTAL ASSETS 170,407 180,663 175,535 OPERATING LIABILITY 56,040 59,097 57,569 NON-OPERATING LIABILITY 41,719 50,319 46,019 SH EQUITY 72,648 71,247 71,948 TOTAL LIAB + EQUITY 170,407 180,663 175,535Explanation / Answer
Average Operating Asset = $167,749
Average non-Operating Asset = $7,787
Average total Assets = $175,535
Net Income = $15,959
Return on Net Operating Assets (RNOA) is calculated below using following formula:
RNOA = Net Income / (Average Operating Asset + Average non-Operating Asset)
= $15,959 / ($167,749 + $7,787)
= $15,959 / $175,535
= 9.09%
Return on Net Operating Assets (RNOA) is 9.09%
Hence, option (D) is correct answer.
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